Howard Erichson reports on the jury awards of compensatory and punitive damages in the NJ Vioxx case, which was the second trial on this matter following the trial judge's decision to vacate a previous verdict for Merck based on newly discovered evidence.

The Texas Supreme Court held that exercising jurisdiction over an out-of state rafting company violated due process although the company's promotional activities in Texas constituted purposeful contacts. Noting that the US Supreme Court has "given relatively little guidance as to how closely related a cause of action must be to the defendant's forum activities," the Texas Supreme Court adopted a "substantial connection" test and held that the rafting company's contacts were "simply too attenuated to satisfy specific jurisdiction's due-process concerns." Would our Thursday interviewee approve?

Click the link at the bottom of this post to listen to this week's installment of the Thursday interview. This week's interview is with Linda Sandstrom Simard of Suffolk University Law School about her article Meeting Expectations: Two Profiles for Specific Jurisdiction. The Indiana Law Review published the article in 2005, but it came to our attention when it was recently posted on SSRN. In the article, Prof. Simard proposes a new approach to the specific jurisdiction relatedness requirement. Here's the abstract:

Personal jurisdiction doctrine is based upon the notion that the exercise of authority over a defendant is fair if the defendant has the ability to predict and control its jurisdictional exposure. Yet, the Supreme Court has neglected to clearly define the criteria by which courts are to define the scope of either general or specific personal jurisdiction, leading to a blurring of the concepts and disagreement among courts and scholars as to the appropriate contours of both types of jurisdiction. This Article focuses on defining the scope of specific jurisdiction to accurately reflect the purpose of the doctrine and suggests that it is a mistake to assume that all assertions of specific jurisdiction may be defined according to a single set of criteria. Rather, the purpose of specific jurisdiction is best achieved by creating two profiles of specific jurisdiction, episodic specific jurisdiction and systematic specific jurisdiction. These profiles would share the basic characteristics of specific jurisdiction (conferring limited jurisdictional authority) while also recognizing that the scope of specific jurisdiction should depend upon whether the defendant expects its forum conduct to be of a finite nature (which would confer a narrower scope of specific jurisdiction) or whether the defendant intends to create an ongoing, systematic relationship with the forum (which would create a broader scope of specific jurisdiction, but one that is still less expansive than general jurisdiction).

The Class Action Fairness Act kept the Ninth Circuit busy in the early part of this month. On March 2, in Lowdermilk v. U.S. Bank Nat'l Assoc., the Ninth Circuit determined that, where a plaintiff pleads damages below CAFA's jurisdictional amount, a defendant must prove to a "legal certainty" that the jurisdictional amount is met in order to remove the case to federal court.

Just four days later, the court issued its opinion in Progressive West Ins. Co. v. Preciado. In Progressive, the plaintiff insurance company filed a breach of contract suit in California state court against one of its insureds, and its insured filed a "cross-complaint" against Progressive alleging violations of California's unfair competition laws. Both the original complaint and the cross-complaint were filed before the February 18, 2005 effective date of CAFA.

In August of 2005, the insured filed an amended cross-complaint to properly allege the elements of a class action. The insurance company then removed the action to federal court, arguing the existence of federal jurisdiction under CAFA. The insurance company argued that, under California's relation-back doctrine, the insured commenced a new action after CAFA's effective date. The Ninth Circuit rejected this argument, saying:

California's relation-back doctrine does not apply in this context. Because [the insured] commenced his class action lawsuit for purposes of CAFA on February 17, 2005 (the time of the filing of the original cross-complaint), one day before CAFA became effective, [the insurance company] cannot invoke CAFA's removal provisions.

But the Ninth Circuit did not stop at this relatively narrow holding. It also said:

We must conclude CAFA does not alter the longstanding rule announced in Shamrock that precludes plaintiff/cross-defendants from removing class actions to federal court. For this reason, [the insurance company] would lack statutory authority to remove the action pursuant to CAFA even if the action had commenced after CAFA's effective date.

Do you think we'll see plaintiffs pleading more cases below the jurisdictional amount to defeat removal of class actions? Or are there ways to bait would-be class action defendants into first filing suit against the would-be plaintiffs/class representatives?

On December 1, 2006, electronic discovery amendments
to the Federal Rules of Civil Procedure go into effect. In this
seven-part series, Judge Lee H. Rosenthal, chair of the Judicial
Conference's Advisory Committee on Civil Rules, offers an introduction
to the new amendments and describes challenges they present for
lawyers, litigants, and judges.

Judge Rosenthal's introduction follows:

The last time the Federal Rules of Civil Procedure were amended to
acknowledge computers was 1970, when the words “data and data
compilations” were added to Rule 34. Thirty-six years later, long after
the computer has become both ubiquitous and essential, it is time to do
much more. On December 1, amendments will go into effect to make the
discovery rules better able to accommodate the vast changes in
information technology that have already occurred and that will
inevitably continue.

The need for the guidance the e-discovery rule amendments provide is reflected in the fact that courts have been applying the new rules since they were proposed, years before their effective date. Because the amendments have to be flexible enough to apply to all
federal cases that could involve electronic discovery and general
enough to accommodate the inevitable changes in information technology,
there are a number of issues the new rules do not address. Instead, the
rules present procedures and guidelines targeted at the distinctive
features of electronically stored information, to help resolve those
issues when they arise. In this seven-part series, I discuss a few
issues likely to arise under the new rules and the challenges they may
present, not only for lawyers and litigants, but for judges.

Badon v. RJR Nabisco is one of my favorite cases to teach to show the proper scope of the traditional fraudulent-joinder inquiry. (The following factual description is simplified for readability.)

Plaintiff was a smoker who sued diverse cigarette manufacturers. She also joined nondiverse cigarette wholesalers. The manufacturers removed, arguing that the plaintiff had fraudulently joined the wholesalers because she could not state a valid cause of action against them. The plaintiff moved to remand, arguing that she had alleged valid causes of action against the wholesalers, namely redhibition and breach of warranty under Louisiana law. The district court denied the motion to remand, and the plaintiffs appealed under 1292(b).

The Badon case linked above is the 5th Circuit's second decision concerning the correctness of the district court's denial of the motion to remand. What happened the first time? The first time, the Fifth Circuit noted there were no clear controlling precedents resolving whether the plaintiff had stated valid causes of action against the wholesalers. So, the court certified questions to the Louisiana Supreme Court regarding whether the plaintiff had stated valid causes of action against the wholesalers. The Louisiana Supreme Court declined to answer.

Now, having received no answer from the La. Sup. Ct., the Fifth Circuit turned back to the correctness of the district court's denial of the remand motion. In this type of fraudulent-joinder case, the court noted, the district court can only ask whether there is a "reasonable basis to predict that the plaintiff might recover" against the nondiverse defendant. It's not a full-scale Erie guess; the court can only find fraudulent joinder if there is no reasonable basis. Having received no definitive answer from the state's high court, the Fifth Circuit concluded that there was arguably a reasonable basis to predict the plaintiff might recover against the wholesalers, and thus the district court erred by not remanding. So, many years later, the lawsuit can begin in state court.

At this point, I stop and ask the students, what is wrong with this picture. Eventually the lights start going on. --RR